Foreign Direct Investment Screening in International Transactions: Mechanisms and Implications for Economic Security

Abstract

In recent years, foreign direct investment (FDI) screening has become a crucial tool for safeguarding national and economic security, especially in the context of growing geopolitical tensions and the increasing involvement of state-controlled investors. This article examines the legal framework of the European Union regarding FDI screening, particularly Regulation (EU) 2019/452, and assesses its implications for economic security across member states. The research also analyzes how the Republic of Moldova aligns its national legislation and institutional mechanisms with EU standards, focusing on Law No. 174/2021. The methodology combines comparative legal analysis and documentary research, supplemented by a case study of a sensitive foreign investment in strategic infrastructure. The findings reveal that while the EU has developed a balanced yet effective mechanism for screening high-risk investments without hindering economic openness, Moldova is still in the early stages of implementing its framework. However, legislative alignment is progressing, and the country has established legal tools to prevent potentially harmful investments. The study concludes that strengthening institutional capacity and enhancing cooperation with EU partners are essential steps for Moldova in ensuring long-term economic resilience and convergence with European security standards. CZU: 339.727.22(478); JEL: F21, F23, K33, H56, P48